NEOPOST_REGISTRATION_DOCUMENT_2017

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Management Report

Risk factors

Information Systems Within the Technology and Innovation department, the information systems teams are continuing the harmonization of the ERP/CRM within the Group, especially in Europe. Moreover, to support the deployment of SaaS-based Communication and Shipping Solutions (CSS), the Group's platform has been enhanced to offer subscription models to clients. The security of information systems is a major focus for Neopost. This need for security is even greater with the deployment of new SaaS solutions. With that in mind, the Group established a specialized structure whose purpose is to ensure the roll out of the security policy and ultimately to ensure the compliance of all structures marketing digital offers under ISO 27001. At the core of information systems, data management is paramount. By harnessing Big Data technologies, Neopost is developing solutions to improve internal operations and providing solutions to clients. In this regard, the Group is ensuring that employee or client data management is compliant with the new GDPR regulations which will become effective from May 2018. To ensure such compliance, a focused structure was established in 2017 with the support of an expert in the field. As part of the Group’s transformation, communication among employees is key. The I.T. teams are working on standardizing communication tools to facilitate the exchange of information. Ethical reference framework The Neopost group redefined its corporate values to reflect its new organizational identity, new businesses and strategic shift in recent years:

Furthermore, the internal audit department conducts cross audits to strengthen these controls. An Intranet dedicated to internal control was launched in early March 2016. With a new dedicated space for each subsidiary, it is designed to improve circulation of procedures and to facilitate communication by providing information on internal control, audits, legal affairs and cash management. A self-assessment questionnaire on internal control was created in 2008 and is regularly update on the basis of the control targets defined within the AMF reference framework and to take into account the specific circumstances of Neopost. The questionnaire was reviewed in 2015 to consolidate it into 60 questions and add a section on action plan monitoring. The answers were presented to the audit committee at its meeting in March 2017. The answers are used to inform the audit plan. Accounting and financial information Preparation and reliability control of information  Each Group subsidiary has a team which reports to the chief financial officer who is a member of the subsidiary’s management committee. Each team includes a management control structure and is responsible for preparing accounting and management data as part of the monthly reporting process. The Group Finance department is responsible for identifying changes in operating conditions in order to anticipate any possible impacts these may have on the Company’s accounting practices. general management is also informed about significant local developments at monthly Operational Reviews, and during other visits to subsidiaries. The Group financial controller has the role of coordinator in this domain. Consolidation The current electronic reporting and consolidation system, which is in place at all Group consolidated subsidiaries, delivers consistent monitoring of budget and management data, improves lead times for producing the data (through automatic task scheduling management, with a reminder system) and improves the accuracy of consolidation information. Using the analysis data which is provided by the subsidiaries’ management control departments via this system and reviewed by local management, the Group’s chief financial officer receives a permanent flow of data that explains any differences in the consolidated reporting. The number of access authorizations to the information system is limited to a certain number per subsidiary to ensure the reliability and integrity of the reporting and consolidation data. This system has made it possible to monitor management indicators; it also produces sales and marketing data for the subsidiaries. Cash and financing Neopost S.A.’s Financial team manages the Group’s cash centrally. In order to mitigate the Group’s risk exposure, the Company has developed procedures, including exchange rate and interest rate risk management, cash pooling and the optimization of the Group’s financing requirements.

• • •

focus on the customer;

promote innovation;

drive to succeed;

foster teamwork. • The Group’s ethical principles

The Group revised its Code of ethic and published the new version early 2017. Based on Neopost's new corporate values, the Code of ethic lays down the main ethical standards and behaviors that the Group wants to promote in its relations with its customers, suppliers, investors, partners and employees. The Group’s Code of ethic lays out the key values which are then rolled out at each subsidiary. It is then the responsibility of each subsidiary to follow through with the necessary reminders to observe local regulations and practices in effect.

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REGISTRATION DOCUMENT 2017 / NEOPOST